Global Economics

Asia Emerges as IT Innovator

A new Accenture survey shows Asian businesses believe they lead the global market in information technology

Asian organizations believe their region now charts the direction in information technology (IT) innovation, according to a recent survey conducted by consulting firm Accenture.

The study noted that 19 percent of survey respondents believe organizations in China now lead the market in IT innovation, while 12 percent say companies in the Southeast Asia are leading innovators. The survey also showed that only 6 percent of respondents believe the United States lead in IT innovation.

Entitled "IT Investments, performance and priorities in Southeast Asia's major economies", the survey polled 48 CIOs and CTOs from Malaysia (33 percent of respondents), Singapore (37 percent) and Indonesia (30 percent). The study is part of Accenture's global high-performance IT research covering 500 CIOs from the world's largest and public sector organizations in 22 countries.

Adrian Marcellus, Accenture's executive partner and Asean lead for systems integration and technology group, said it was not surprising that China is now perceived to be the leading innovator because the country is now at the forefront of technology.

"China is not about labor arbitrage and cheap manufacturing capabilities [anymore]," Marcellus said last week at a press briefing here. "Instead, a lot of today's innovative technologies and newer software are developed by them."

He said this trend was driven by mergers and acquisition (M&A) activities within China, as the country attempts to reach out to the rest of the world as fast as possible through technology.

The big IT spenders were initially from the United States and many M&A activities were concentrated in the country, he said. However, he noted, the United States has fallen behind in terms of IT innovation.

Marcellus explained: "There were a lot of questions surrounding those [M&A] initiatives and in spite of the spending, it has since lagged behind Asia in IT innovation." He added that the dot-com overhang had contributed to the lag.

However, despite the positive outlook for organizations in Southeast Asia, he noted that they need to be more targeted in their spending if they are to achieve a competitive edge in the global marketplace.

"Southeast Asian enterprises have spent a lot on enterprise resource planning (ERP) to integrate their entire organization, but have not spent on targeted areas to improve business growth," Marcellus said.

"CIOs today need to look at investments in technologies, such as Web services and service oriented architecture (SOA)," he added. "Only when innovation is part of the business will it have the support needed to drive overall growth and competitiveness [in the organization]."

WHERE'S THE ROI?

In addition, Marcellus said the survey revealed that operational delivery is still lacking in Southeast Asian organizations, diminishing the impact of time and resources spent on strategic priorities.

"In another study last year, we found that only 43 percent of 300 enterprises surveyed worldwide had achieved half the targeted business benefits from large-scale enterprise applications programs," he said.

The organizations, he noted, struggled to replicate similar processes and methodology used in the projects they undertook, and failed to utilize the same best practices across every project.

"When that happens, the projects cost goes up and companies won't reap the business benefits of IT," he said.

According to Accenture, other key survey findings included three other key points:

Southeast Asian enterprises are not ready to take advantage of IT-enabled business processes;

they lack access to critical business information; and

they are too focused on fixing infrastructure complexity rather than on the implementation of an on-demand and agile infrastructure.